Is Hardware Success The Solution Provider's Worst Enemy?

No matter how fast you are moving to transform your business in the cloud services era, the depressing reality is you are not moving fast enough. In fact, far too many solution providers have held off on the significant investments needed to make the move to cloud services because the traditional hardware business has remained robust.

If you want a look at what it takes to make the move, you need look no further than how John Iacone, the founder and CEO of International Integrated Solutions (IIS), No. 121 on the 2014 CRN Solution Provider 500, is transitioning his company

Plainview, N.Y.-based IIS, which recently celebrated 25 years in business, was named the HP Solution Partner of the Year in Big Data last month because of its success in moving from a hardware supplier to a big data solution provider with HP's Vertica as a mainstay offering.

[Related: Living On Borrowed Time: Why Channel By Convenience Is Dead]

Iacone told colleagues at the recent HP Global Partner Conference that the secret to IIS' success was making the $1 million investment to get the big data business off the ground. IIS hired a chief data scientist to run that business and an independent consultant to help understand the marketing capabilities unleashed by big data.

IIS' big investments are now driving strategic discussions between the company and chief marketing officers. That's no small matter given that research firm Gartner has forecast that by 2017—just two years from now—CMOs will spend more on IT than CIOs.

"We're having pretty dynamic discussions with CMOs on things that can have a big impact on a company's business model," said Iacone. "We are providing business value at the CMO level and we are delivering the total solution. The customer can buy the whole thing from us. We walk it in the door and they start to use it day one."

Iacone said the lesson to be learned from the IIS story is that such a transformation requires a big partner investment. Far too many solution providers think they can make such a move without making that big investment. It's just not possible. In fact, relying on a vendor as a crutch is a surefire way to fail.

IIS also has invested heavily in a marketing transformation effort that makes sure its brand is seen as the trusted big data brand for customers. In fact, the IIS marketing transformation has the company driving its own big data leads from its website.

Iacone said he sees the success of the current hardware-based model as a major issue for solution providers that have not stepped up to the cloud services challenge. "It's a huge issue," he said. "We probably have four or five years to live in the current space. But if you are not starting to transition now or haven't started before now, the odds of you making it are not good."

For all solution providers, the call to action is clear: No matter how fast you think you are moving, you need to move faster.

BackTalk: Are you moving at digital speed? Let me know. Contact Steven Burke at [email protected].